Senator PATRICK: Secretary, there are a number of questions on notice that I have asked since the last estimates. I want to go through a few of those. One of them was tabled through the Senate. I'll go to question 952, tabled in the Senate, that was returned to me I think today. It dealt with issues of tax returns and late tax returns. I was asking how many people had not filed a tax return in the current year, for two years, for four years, six years et cetera. And it appears this data's not being tracked by the agency.

Ms Leon: Senator, could I just ask you to say again which question that was.

Senator PATRICK: That's question No. 952, but from the Senate chamber, not from estimates. The burden of the series of questions is looking at tax returns. The representations made to me by constituents basically say that there are people—they'll often say 'husband', and I know that most of the people paying child support are males; I think I saw a statistic at one stage of something like 95 per cent—who are not lodging a tax return. So there are issues of husbands not lodging tax returns and not doing so for a number of years. What I was trying to do with that question was establish a magnitude, so I'm just going to have to go on the fact that I've had lots of complaints. What's the agency's remedy in these circumstances? I understand if someone doesn't lodge a tax return you adjust their income up with a CPI figure. But what's being presented to me is that some people have had an increase in salary or they've changed jobs or they've got a better job and they simply don't lodge a tax return. Their income capacity is clearly higher than what the current assessment might otherwise say. How do you deal with that?

Ms Leon: We are just getting the relevant experts to the table, Senator.

Mr Young: We certainly look for child support customers to lodge tax returns and we have a relationship with the Australian Taxation Office in order to facilitate that process. Where a return is not lodged, we then use the best available information we have to determine the income. So we have a policy that sets out our approach in that regard, and there's really a hierarchy. Often it may be based upon their occupation, their previous income, information that we have available, and applying CPI to that. At the other end of the continuum is a default income that applies that can be connected with average weekly earnings.

Senator PATRICK: So here's my problem. The principle—I seem to recall reading this in the act at some stage—is that there's an obligation on parents to be open and transparent about their salaries, and then a calculation is done. If someone's not lodging a tax return, firstly, I don't believe they're complying with that fundamental principle of being open and transparent with the agency. But it's also unlawful not to lodge a tax return from a tax office perspective. So what's being described to me is that a paying parent is not lodging a tax return for significant periods—they're not doing it for year after year after year—and I accept that you have a mechanism for dealing with that, but it's really about enforcement. It's about actually pursuing. I don't know whether you simply lack the powers or whether it's a case of there being no talking between the agency and the tax office to get the tax office to start enforcing its laws, because it's unlawful not to lodge a tax return.

Ms Leon: Of course, we would prefer that all of the paying parents lodged their tax returns and paid the child support that they are supposed to pay under the legislative formula. But, as you say, the responsibility for chasing up taxpayers who haven't lodged their tax returns rests with the ATO, not with the department, and the department doesn't have any powers under the legislative scheme to compel paying parents to lodge their tax return. So we use what mechanisms are available to us under the legislation, which have been set out by the general manager, but we don't have the power to compel them to lodge their tax return.

Senator PATRICK: But can't you have a conversation with Commissioner Jordan and have them enforce this? Maybe it's something I need to go and talk to the ATO about, but I would have thought the department would have gone to the ATO and said, 'Hey, you've got a problem, and there are children suffering as a result.'

Ms Leon: We do have good relationships and good working relationships with the ATO, and I'll ask Ms Bridger to talk about what we have attempted to do in that regard.

Ms Bridger: We do have constant engagement with the ATO, principally on the back of all of the data exchange that we have, and we have worked with them to help prioritise the cohorts of parents that have not lodged tax returns. We have broken them into priorities, whether that be that over time the tax return has not been lodged by either the payee or the paying parent or whether it be by dollar amount. So we do engage heavily with them on what we want them to do from the perspective of compliance, but ultimately it's the responsibility of the ATO.

Senator PATRICK: In a circumstance where someone hasn't lodged a tax return—I'm just thinking perhaps of a remedy—surely there could be a mechanism whereby suddenly it became almost a punitive number that would get adjusted backwards. My concern is that there are parents and carers who, in their view, are not receiving the right amount of tax. Could you do something like initiate a change of assessment? I know there are eight reasons for initiating a change of assessment; is there a case that maybe there needs to be nine and that a more investigative approach to their salary needs to be adopted?

Ms Leon: That would be a policy matter. We deliver on the legislation as it's currently enacted, and the policy rests with the Department of Social Services and the minister for social services. Mr Jackson, I think, may have something to add.

Mr Jackson: Just as additional background, recommendation 19 of the report of the 2015 parliamentary inquiry into the child support program, From conflict to cooperation, recommended that the ANAO conduct a performance audit between the ATO and the department on how we address nonlodgement of tax returns by child support parents. That audit was finalised and released in May 2017 and found:

Child support collection arrangements between the Department of Human Services and the Australian Taxation Office are based on well-established administrative processes in each agency, but there is scope to improve important aspects of these arrangements.

There were five changes recommended by the ANAO, which I can go through if you wish me to. But, equally, the department and the ATO have been entered into an abridged arrangement for lodgement enforcement activity for child support customers that underpins the collaborative approach between the two departments to ensure more accurate assessments are made.

Senator PATRICK: That sounds very bureaucratic. It doesn't actually give me something where I can put my hand on my heart and say, 'This is how you are enforcing that circumstance.'

Mr Jackson: Sure, but it does give the assurance of the ANAO that they are well-established practices.

Senator PATRICK: Well, hang on; I've got a bunch of constituents telling me that this is not happening, that the agency is not acting on people who haven't lodged tax returns after a period of time. I've got the secretary saying, 'Actually, that's outside our power.' I understand you have to operate within power. Minister, there's clearly a problem here. The secretary is almost calling out for a solution, saying she's doing what she's empowered to do, and there are parents who are missing out on payments.

Senator Fifield: I think the secretary has also indicated that the ownership of policy in this area is in the social services portfolio as opposed to the human services portfolio, so that would be the appropriate committee in which to raise the policy issues.

Senator PATRICK: All right. Rather than doing it by way of estimates, Minister, perhaps I could seek your assistance in arranging a meeting with the minister, or perhaps with the two ministers.

Senator PATRICK: Okay, I'll leave it at that. I take away from that that there's still a problem and at this point in time you don't have the powers to remedy that situation—and maybe the Treasurer as well, in terms of the tax office.

Just a couple of other questions. I asked a question, HS82, about the fact that CSA online, as far as I'm aware—and I'm a user of that system—doesn't allow you to log on to the child support system and then send a message to a case officer. I've had personal contact with a case officer who said that the way to deal with that is to simply send an email to, effectively, a government email address. I have great concern that people may be providing information that is personal and sensitive, because they are compelled by law to do so, because we have an absence of the ability to use the normal system to send what would otherwise be an encrypted message.

Ms Bridger: Towards the back end of last year we launched a new online service, and it's been released to 50,000 of our child support parents and users. When we launched that service, we shut down what was the existing online message service and transferred the 50,000 onto a new online service, which is encrypted; they can access it through the new online service. The remainder were moved across to the corporate messaging service, which users can access via email, and that falls under the usual security protocols for all emails that come into the department.

Senator PATRICK: I have no issue with the email once it arrives inside the department; I know you secure it. My problem is that, between my laptop or my desktop and the server that receives that message, it is completely open. Whilst you've got 50,000 people who are taken care of by way of an encrypted service, I seem to recall you've got something like a million customers, haven't you? It's a very large number, and their data is flowing. Mr McHardie, you would understand that an email travelling from a customer's standard email address to a departmental address, via typical email applications using TCPIP and SMTP and all those sorts of protocols, is completely open and very easily intercepted.

Mr McHardie: You do have the facility within your secure myGov inbox as well to be able to email back into DHS, which is a secure facility.

Senator PATRICK: I'm focusing on the emails that have gone from customers' laptops and desktops to this other email address. You accept it's totally unsecure up until the point at which it gets to the DHS server?

Mr McHardie: Yes, and that is why one option is to use your secure myGov inbox.

Senator PATRICK: I asked the question how many emails had been received over a particular period of time. I think 90,000 was the answer that came back to me. These are all, in my view, serious privacy breaches. Someone can simply access that. And I know personally I was advised that that was a method by which I could communicate my child support information, my salary information, the details about my children, my care arrangement, their addresses, my addresses—over the internet, all freely open.

Mr McHardie: I couldn't give you an answer on numbers. We'd need to take that on notice.

Senator PATRICK: All right, I'd ask that, but, more importantly, how are we allowing this to happen? This is a massive, massive privacy issue.

CHAIR: Senator Patrick, five more minutes.

Senator PATRICK: Sure. I note for the Hansard that there is silence in the room.

Ms Leon: I wasn't aware that you'd asked a question. I thought you were saying that you considered it was a massive privacy issue.

Ms Leon: I'm not aware of any privacy breaches that have arisen from the provision of the email service. We do offer myGov a secure email inbox, and we also have a process whereby we will in due course transition everyone onto the online portal. At the moment it is only a segment of the child support population that's using the online portal. Over time we will transition those.

Senator PATRICK: I understand that. I have just taken evidence from Mr McHardie that it's not secure. There are people communicating information across the internet that includes information that is private and most likely they are compelled to provide that information by law.

Ms Rule: They're not compelled to provide it through that channel.

Senator PATRICK: I understand that. This is a fairly serious issue. It's not a question of opinion; it's a question of fact.

Mr McHardie: There is a facility known as the myGov inbox.

Senator PATRICK: I understand that. But you are directing people to use a service which is not secure and over which they pass their personal information. Why would you tell someone to send information across a line that you know is insecure? That's a question. I've got silence, for the Hansard record.

Ms Rule: It's important to note that this is just one way in which people can provide their information to us. We are transitioning from an old outdated system to a more secure system. Customers have told us they want to continue to be able to submit information to us electronically during that transition. This is one option for people to provide that information to us.

Senator PATRICK: In the conversation I had with an officer, they didn't say to me, 'If you send it this way it's totally insecure.' Those cautions weren't provided.

Ms Rule: I'm happy for us to review the scripting that's provided to our customer service staff. I can't tell you what that is.

Senator PATRICK: If there's an alternative method, why do you even direct anyone to use that method?

Ms Rule: Because people have asked for it.

Senator SIEWERT: I have one cross-portfolio question. Can I ask the question that I asked this morning in terms of trying to resolve the issue about the letters that are going out to people with vulnerabilities. You will recall that I asked a question without notice in the Senate, to which Senator Concetta Fierravanti-Wells responded, and then subsequently tabled further information, I think it was the next day, where the senator said:

I wish to add to remarks I made in question time yesterday in response to a question from Senator Siewert regarding debt recovery to people with a vulnerability indicator who are receiving income support. I've confirmed that no farmers have been included in the initial phase of the trial.

I also wish to add to an answer regarding your question, Senator Siewert, about the number of people involved in the trial. I am advised that less than 300 people have been contacted by the Department of Human Services to update their details in the initial phase. Further, I can advise the Senate that the Department of Human Services ceased contacting recipients in these cohorts on 2 August 2018 whilst the minister assesses the recent outcomes.

I have some questions about that, anyway. Subsequently to that you will note that I asked a question on 2 August about this. That's about when the trial or letters ceased. In answer to the question I was told, 'No, there are no recent policy changes to online compliance. No individual in remote areas are identified as vulnerable and have begun receiving OCI letters.'

Ms Leon: It's less than 300 people. Those people are not subject to the online compliance process. We designed a staff-assisted process specially to attend to their particular potential needs and circumstances. They receive a letter, but they then are contacted by telephone to work through their potential overpayment so they are not sent to the online compliance portal. They weren't at any point in the sending of those 300 letters.

Senator SIEWERT: So they receive a letter. Could you table a copy of the letter or, if you don't have a copy, take on notice to provide a copy of the letter they received?

Ms Leon: We'll take that on notice.

Senator SIEWERT: When you say less than 300 have been contacted by the department, how many were sent letters and how many were subsequently contacted?

Ms Leon: At 28 September there have been 289 reviews that have commenced.

Senator SIEWERT: I asked about reviews commenced. Is that letters, or do you mean that's when the number of people the department has subsequently contacted were phoned?

Ms Cross: That's the number of letters that were issued.

Senator SIEWERT: How many have the department—my understanding was that there was a letter sent, and then I understood from your comment, Ms Leon, that the department subsequently followed that.

Ms Leon: They can then call us on a dedicated phone number. There are 114 that we have now had that telephone contact with.

Ms Leon: And the others remain on foot. It's not that they are abandoned. We'll continue to work through the 289 cases that have been commenced.

Ms Cross:If I could just add to that, you know that we have moved to registered mail, so there are a number where the letters were returned because they weren't receipted. We're not pursuing those further.

Ms Leon: There were 222 that have been receipted, so we know the person has received them.

Senator SIEWERT: Could you tell me what sort of vulnerability indicators there are? How did you choose the people you sent letters to? What are the vulnerability indicators?

Ms Cross: Of the 289, some 52 of those have vulnerability indicators. The other 237 were from remote areas. In terms of vulnerability indicators, these are the flags that are put on job seeker records. Examples are psychiatric illness, drug/alcohol dependency, homelessness, significant lack of literacy or language skills—the normal indicators we use for job seekers.

Senator SIEWERT: You say 52 had vulnerability indicators and the rest were for remote areas—but not farmers.

Ms Cross: Yes. It was the trial of vulnerability and remote.

Senator SIEWERT: Thank you. So it was suspended—sorry, I have used the wrong word, I think.

Ms Cross: Suspended or paused.

Senator SIEWERT: It says 'ceased contacting recipients …while the minister assesses the recent outcomes'. That was on 2 August. What does that mean?

Ms Cross: From 2 August we have issued no more letters. We are now proceeding with the ones which were issued and we will evaluate the outcomes of that process.

Senator SIEWERT: What's the process for assessing the outcomes, and what's the time frame?

Ms Cross: What we will look at is how the customers responded to the letter, whether they accessed social work services, whether some of them voluntarily said they'd prefer to complete the process online, whether they wanted to do it through an assisted channel, how much support they needed, what issues came up so. We'll look at all of that so we can see whether there were any issues in the handling of those customers in response to the letters.

Ms Cross: We'll continue through the group of recipients until we have a sizable response pool. We will actually contact some of them to discuss directly what their experience was.

Senator SIEWERT: These 289, were they identified by the same process that you used for identifying—how were they identified?

Ms Cross: I'll have to check exactly how we identified them.

Mr Storen: We drew them out of the same pool as the rest of the employment income data matching. We did that intentionally because we didn't want to unbalance the trial by selecting particular types. At 300 I couldn't tell you it's statistically valid, but it is a genuine cross-section of vulnerable and remote customers where the data indicates that we need to resolve the income mismatch.

Senator SIEWERT: I will follow up with the rest of the questions in the normal section.

CHAIR: Senator Watts on outcome 1?

Senator WATT: Could I begin by dealing with performance rates for the department. We've had a look at the annual report for 2017-1 and compared it to 2016-17. It seems to me, if I am reading this correctly, that the satisfaction rating for users of different services of the departments has fallen in a number of respects between 2016-17 and 2017-18. For instance, in 2016-17 the satisfaction rate with Centrelink was 50 per cent. In 2017-18 it has fallen to 46½ per cent. For Medicare it has fallen from 71 per cent in 2016-17 to 70½ per cent, so that is basically about the same. For child support it has gone down from 46 per cent to 38.8 per cent. Is there a reason across these services that the satisfaction rate has fallen, particularly child support?

Ms Leon: In relation to child support, I think we have canvassed at estimates on previous occasions that there was in 2017-18 an increase in time taken to answer the phone and some impact on time to process. They are factors that we have since addressed, so the time to answer the phone in child support, which had gone out past our usual KPI for part of last year, we have now got back down to a figure more like our usual KPI performance. We acknowledge that if people have to wait longer on the phone than they are used to then that probably does impact their satisfaction because of the degree of effort they've had to put in to get through to us. We have taken steps to resolve that so that the phone answering now is occurring much more quickly. I expect that will be reflected in the statistics for the current year.

Senator WATT: Do you think that fall in satisfaction was largely a function of the length of time that people were waiting on the phone and the busy signals and things like that?

Ms Leon: I don't know that for certain, but I think it's fair to say that if you have had an increase in your telephony answering time, it wouldn't surprise me if that flowed through to a decrease in satisfaction. In relation to customer satisfaction on social security and welfare, I don't have the 2016-17 report with me, but I have an extract from the figures. I will check that we are looking at the same thing. My advice is that in 2016-17 customer satisfaction was 69.5 per cent and in 2017-18 it was 75.2 per cent.

Ms Leon: That was customer satisfaction—achievement of customer satisfaction standards, for social security and welfare.

Senator WATT: The figures I have here are for Centrelink, Medicare and child support. The figures you have given, are they for an overarching category?

Ms Leon: Medicare customer satisfaction, our health customer satisfaction, the total of providers and customers has gone up from 81.7 per cent to 83.7 per cent.

Senator WATT: This might be related to what you were just telling me, but did the department meet its target of 85 or more per cent of survey respondents being satisfied with their most recent interaction for 2017-18?

Ms Leon: No. Eighty-five per cent is our target, and we are at 75.2 per cent. Obviously we are still—

Ms Leon: Yes. We still aim to meet the target, and we are putting a lot of work this year into improving customer experience and better understanding the drivers of customer satisfaction.

Senator WATT: I think I'm right in saying that the department has failed to meet that target—that 85 per cent or more of survey respondents are satisfied overall with their most recent interaction with the department—for three years running: 2015-16, 2016-17 and 2017-18. Is that correct?

Ms Leon: Yes. As I said, we're putting a lot of effort now into understanding the drivers of customer satisfaction and into seeking to address those, so that people, when they ring the department, will get through more quickly. We have deployed a lot of extra resources onto telephony to try to achieve that. The deploying of additional resources onto telephony is freeing up staff resources to address processing, so that people's claims will be processed more quickly. Those are significant drivers of satisfaction. So we expect that, as we improve the customer experience on both those fronts, we will see an improvement in customer satisfaction.

Senator WATT: You were saying that your theory—I'm not trying to use that in a pejorative sense—on why your target has failed to meet that target and for the falls in satisfaction ratings for some of those services that we were talking about before, is that it is largely due to the length of time that people were waiting on phones or getting busy signals and things like that. Was there any research conducted to back up those—

Ms Leon: I will pass to my service delivery experts in a moment, but we have data about what people complain about. That is a useful source of information and evidence about what people are dissatisfied about.

Ms Leon: For Centrelink, for example, for the 2017-18 financial year, there were 96,331 complaints about claims and applications. More than half of those, nearly 60,000, were about how long it took. There were 28,622 complaints about the phone service. Of those, over 80 per cent were about either receiving a busy signal or having a long wait time. So, although the complaints are only a very small proportion of our interactions—

Ms Leon: That's right. Although the complaints are less than two per cent of our interactions that lead to a complaint, it's nevertheless a useful source of information about what things are making our customers less than satisfied.

Senator WATT: I hear what you are saying: you're putting in a lot of effort into trying to address these issues. When did you start as secretary again?

Ms Leon: A year ago.

Senator WATT: I thought so. So I realise you haven't been in that role for all of that time, and maybe this is a better question to direct to the minister. Minister, why is it that the poor performance on satisfaction targets was allowed to continue, year after year, before action was taken in the way that we are hearing from Ms Leon?

Senator WATT: It is now, but the department has failed to meet its target for at least the last three years. There has been a flurry of activity, it would seem, in the last 12 months, which is good, but why did it take that long?

Senator WATT: Is there any reason for the first four years when things weren't deemed serious enough to—

Senator Fifield: I don't necessarily accept the premise on which your question is based—that there wasn't work being undertaken to improve the situation previously. I'm sure that the Department of Human Services and the ministers who have held the office have always been seeking to improve the service to the community.

Mr Jackson: I can add to that as well. One of the criteria that we measure satisfaction on is the outcome of the claim. If we reject a claim, then that does lead to a perceived dissatisfaction, even though we've handled it very well. And, given that there is a reasonably high rate of rejections, particularly in certain claim types, that will feed into that rating, which, in some regards, almost challenges whether the 85 per cent could ever be achieved if you're rejecting—

Senator WATT: Yes, but that doesn't impact on things like the time taken to receive a service, where I think there was 55½ per cent satisfaction, and ease of access of services, which was at 66.6 per cent satisfaction. That's got nothing to do with whether claims are accepted or rejected.

Mr Jackson: Understood.

Senator SINGH: I want to ask about some of these complaint figures. I notice that your 2016-17 annual report outlined that complaints about Centrelink rose from 168,709 to, in the 2017-18 annual report, 236,563. That's about a 40 per cent increase year on year. Is that right, Ms Leon?

Ms Leon: I haven't done the maths, but clearly it's a substantial increase in that year.

Mr Jackson: The evidence we've given at previous committees is that, I think that at about that time, we also changed the manner in which people could complain to the department. We actually made it a lot easier for people to complain by including the facility on our public website, so we actually encouraged people to complain where they could so that we could improve our services and get greater data. That obviously is a two-edged sword, because, as you pointed out, if you make it easier for someone to complain, they will do so. But the positive side of that is it has given us a lot richer data, which we're now using through the voice and analytical to actually listen to the complaints and actually then survey these people to then be more targeted in how we do respond to that. We do see some significant benefits with regard to when we make improvements on a certain aspect where we can actually measure that the complaints associated with that particular issue are dropping significantly, so we do have some empirical data that supports that as well. So, whilst your point is mathematically correct, it equally enriches our data to improve our services.

Senator SINGH: I presume that's the same reason why there is also a large increase in complaints about the department's services as well in those two annual reports from those two years—204,583 to 265,293 in those two years. That's 30 per cent, isn't it?

Ms Leon: We won't know until we've gone on a bit longer the extent to which the ease of making a complaint is feeding that increase compared to the empirical experience of either telephony or processing times. The 2017-18 year is the first year where people could just hit the button on the website, and so we will be able to assess, with the passage of a bit more time, the extent to which that ease of making a complaint is driving an increase or whether it is more closely related to the factors we've been discussing about timeliness.

Senator SINGH: Let's look at the resolving of complaints. Again, in the annual report for 2016-17, the department resolved 71 per cent of Centrelink complaints within 10 working days. What was the resolution rate for complaints completed in 10 days in 2017-18?

Ms Leon: I am not aware that a specific decision was taken to leave it out, but I don't know what occurred in the production of the annual report that led to that. I am happy to get back to you both about that and about what the resolution rate was.

Mr Jackson: We would have that data, because we track every complaint, record how we deal with them and their outcomes, and learn from them where we can. We can absolutely get back to you.

Senator SINGH: That's why it's a bit surprising that it's not there. On that, can you also advise the committee of the 2017-18 resolution rates for Medicare and child support allowance, with the percentage of complaints resolved within 10 days. I think that's still the kind of matrix that you use, isn't it?

Senator WATT: Just before you get into it, we have been looking at the telephony report that you provided. Thank you for doing that. I can see that that compares the most recent quarter with the same quarter 12 months ago. There's also a page here, which is a sort of financial year figure.

Ms Leon: We are trying to be guided by what you usually ask us. We did give you both versions.

Senator WATT: Yes, that's good, very helpful. I take it that the 2017-18 report is for the full financial year?

Ms Cattermole: We have engaged two staff through a recruitment agency, starting on Monday or thereabouts. What was contemplated with that engagement was the possibility of up to 10. When and how we bring those others on will depend on the need over the coming weeks, months and beyond. At the moment, none of those people have started yet but we do have two people who I'm expecting to start on Monday. If there proves to be a continued need, the intention is that we would bring on up to a further eight, all of whom are performing very simple administrative tasks for us on the back end of our systems on a time limited basis because it's the kind of work that we see reducing over time, particularly as we put a fairly significant investment into the modernisation of the systems. The idea is that we will have that small number and that will free up some of our customer-facing staff in our Hobart office, who spend a bit of their time having to do that very simple administrative work. This frees them up to spend more time on all their more complex, customer-facing work.

Senator WATT: Is it the department office overall or is it in a Centrelink bit or a Medicare bit?

Ms Cattermole: It's a bit of both. I am contemplating that the staff we've engaged on this occasion will be doing work related to the health parts of the business. We have two offices in Hobart down the street from each other, and they will be sitting alongside staff who primarily work on the social services part of the business, simply for room reasons.

Senator WATT: But these people will primarily be doing health-related work?

Ms Cattermole: Yes. Just to explain it: as I'm sure you know, we have an enormous, diverse range of programs and services that we deliver through my part of the Department of Human Services. Some of that work comes in via email inboxes—for example, applications for registrations to the Australian Organ Donor Register and applications for updates to people's information on the Australian Immunisation Register. A lot of that work is often sent via email. Even though we're a very highly digitised business, there are pockets of the health part of the business that are less digitised. What happens is that because we're still working on some quite older systems, particularly through those emails and then, obviously, working on our newer ones, those documents need to simply be printed and scanned to then be drawn down by staff who do the processing work and turn that around as quickly as possible.

Senator WATT: Just to be clear: in total we're talking about up to 10 individuals?

Ms Cattermole: That's correct. None of whom have started yet, but I'm contemplating two next week.

Senator WATT: When you say the health-related part of the business, is that another way of saying Medicare? Are they all, in some way—

Ms Leon: The health-related part of the business, as Ms Cattermole was outlining, covers Medicare and a wide range of other programs, including things like the Organ Donor Register and the Immunisation Register. We run multiple programs for the health department. Obviously, Medicare is a very large program that we deliver, but we also run these many smaller programs, and people contact us by email to provide information, which has to then be electronically translated into the systems for processing.

Senator WATT: Is this the first time the department has engaged people via labour hire to perform this Medicare and other health-related work?

Ms Leon: To perform that work that we're discussing it's the first time we have. Up until now, what we've been doing is using our more highly skilled customer-facing staff to do this work, which actually would be better done by people at a lower level so that we can free up our customer-facing staff to process applications and talk to customers.

Senator SINGH: How many jobs have been lost in Tasmania to make space for these labour hire jobs?

Ms Leon: None.

Ms Cattermole: None whatsoever. These are additional resources that we're bringing in on a short-term basis because the nature of the work, as the secretary was describing, takes up time for our customer-focusing staff. Also, it's the kind of work that is starting to reduce over time. As we modernise the system and we're putting in—as I think you know, we have a recent budget measure putting in a significant investment. The more we do that—and we're working a lot on the back end—the less we have of that work, and that's the idea. It's actually a reducing body of work. What we want more and more is for our customer-facing staff to be not only fully brought to bear on that work but also continually trained and focused on that what is more complex work, of which there will be more and more over time as we modernise the back end of the system.

Senator WATT: So, we have up to 10 people being engaged through a private company on labour hire in Hobart to perform work related to Medicare and other health services? That is the first—

Ms Leon: I think I did say it's not Medicare; it is other programs that we deliver for the Department of Health.

Senator WATT: I thought you said it was health work including Medicare.

Ms Cattermole: Perhaps I could be absolutely clear. The vast majority of the sorts of documents that would come in through our email inboxes, which is one of the many channels through which people engage with the health services that we offer, relate to the PBS. They can be scripts, which are frequently still sent in letters in envelopes, and things like registrations for our registers. There is also a body of other things that occur—for example, pharmacists will send in requests for scripts, because we still, obviously, as you know, issue paper scripts. They will send in requests, and these people would be processing those requests.

Senator WATT: You probably said this, but they will be doing what exactly?

Ms Leon: They will print out the emails. Because this part of the system hasn't yet been modernised, though we do have a program on foot now to modernise that back end of our health system, these things come in by email but then have to be electronically connected to the processing system. The way that we do that is by having someone—and that's what we're engaging some people for that are kind of equivalent to an APS 1 that we don't have any of—print them, scan them and then upload them to the system, where they get processed by our own staff.

Senator SINGH: If it is an APS 1 position, why not employ APS 1 candidates? You've had thousands of candidates apply for jobs in the department. It's in your annual report for 2017-18. You had 28,000 candidate applications. You had 658 vacancy notices. Why go to a labour hire company to do this work?

Ms Leon: Because, as Ms Cattermole said, this work is going to disappear. You don't want to put people on who you're then going to have to get rid of. It's a flexible workforce so that when we no longer need that workforce we no longer need to continue the labour hire arrangement.

Senator WATT: I think the point is that there are plenty of people out there who are looking to be employees of the department at all levels, as opposed to looking for labour hire positions. How long is the contract for for these labour hire positions?

Ms Cattermole: Up to 12 months.

Senator WATT: We know from past estimates that you've got plenty of people working on a temporary basis for up to 12 months—in fact, some would argue too many. It's not as if the department doesn't already do that.

Ms Leon: We make decisions each time we're filling an employment need about what's the most suitable mechanism to do that. On this occasion, we've selected labour hire as the most convenient, flexible approach to fill these roles.

Ms Black: It would depend on how many people were engaged under the contract.

Senator WATT: Is it on a per-person basis, that you pay X dollars per person?

Ms Black: That's my understanding. I would like to take it on notice to check for you. There's no total value of the contract I can provide you.

Senator WATT: Was there any comparison done prior to embarking on labour hire to work out what the equivalent cost would be of employing people directly to do this work?

Ms Leon: We went with labour hire because it's quick and convenient for a small number of jobs that are inevitably going to disappear. It's a quick, convenient, flexible way to get some people in to do some work. It's not only about the cost per employee—I think the cost per employee is likely to be comparable—it is a very convenient way to engage a short-term, flexible, temporary work position.

Senator WATT: Sure, but is that the only consideration here? You have people who are being engaged—they might not be processing PBS claims, if that's the right terminology, but they're involved in the processing of them. They receive emails, they print emails, they upload emails, they have access to people's personal information—

Ms Leon: And they are subject to all of the same training and privacy requirements as our own staff.

Senator WATT: What I am asking is: is quick and convenient for the department necessarily what members of the public who rely on your services are looking for?

Ms Leon: The public would also expect that their privacy is protected—

Ms Leon: and it will be by all of these staff who are working under our supervision.

Senator WATT: My experience in other estimates committees, if not this one, is that very often I've been told that labour hire solutions are actually more expensive to departments than employing people directly, which is why I'm interested to know whether anyone looked at whether—it might have been quick and it might have been convenient for the department, but was it more costly for taxpayers? Are there other problems for taxpayers that arose?

Ms Leon: If you're wanting to look at a cost-benefit analysis then it's not as straightforward as simply saying, 'How much did we pay in the contract?' because, as I think we've canvassed in this committee before, the employment of staff has a whole lot of overheads that we're carrying across the whole department. If we were going to do that kind of cost-benefit analysis, we'd have to also do an assessment of the time taken to recruit, to referee recheck and to engage and the overheads that the department incurs by way of all staff on-costs. For an engagement of up to 10 people, I don't think it's necessary for us to undertake a substantial cost-benefit analysis to gather up all of those overheads when our experience across the board is that you can get a labour-hire employee for a cost that is broadly comparable—when you take all of those costs into account—with our own engagement. The reasons for selecting labour hire versus employment go to more than just cost.

Senator SINGH: That's a fairly philosophical position you've just put. You're talking about the Australian Public Service and you're talking about the outsourcing of the Australian Public Service—

Ms Leon: No, outsourcing is when you ask a private company to undertake the work for you. We have engaged labour hire to bring people in who are working on our premises, under our direct supervision, so that's not outsourcing.

Senator SINGH: You're creating a second-class workforce within the Public Service because you have one lot who are actually part of the Public Service and another lot who are employed by a labour-hire company. Ms Leon, you said that these jobs are equivalent to an APS 1.

Ms Cattermole: They're an APS 1 or 2.

Senator SINGH: Can we just break that down. APS 1 or 2—what are we talking about salary-wise there? What's the salary of an APS 1 or 2?

Senator SINGH: I think you've just admitted it. You just said that the people who were doing these jobs within the department were on a lot higher than APS 1 or 2, and now you've employed people who are in a labour-hire firm to do them at APS 1 or 2.

Ms Leon: People who are skilled and capable staff with customer-facing skills, experience and the ability to process people's applications do feel that it is a bit of a waste of their time to do much lower-level work. Any business would say that you try to allocate work at the skill level that the people are equipped for.

Senator SINGH: That's fine. You've explained that philosophical argument a few times. Senator Patrick has just given me a table from the Department of Health's website which shows APS 1 is a band of $44,000-$50,000. Can I get some confirmation of what salaries these employees being employed through the labour-hire company would be paid.

Ms Leon: We'll have to take that on notice. I haven't got the contract with me.

Senator WATT: This hiring of labour-hire staff in Hobart, is that being considered for any other locations or for other roles with the department?

Ms Leon: We have labour hire already in many places throughout the department, and we'll continue to look at what's the most appropriate form of engagement for a range of functions going forward.

Senator WATT: Are there particular functions that the department is currently considering engaging labour hire to perform?

Ms Leon: We already have a substantial number of labour hire who are undertaking compliance work. We have some labour hire already in our corporate and enabling services. We have a small number of labour hire on a trial basis, helping people in front-of-house to use our digital systems. And we have a lot of labour hire or contractors in our IT department.

Senator WATT: With the front-of-house roles, do you know how many—for instance, in a Centrelink office or a Medicare office—

Ms Leon: where people can self-serve with digital services. These front-of-health roles are just to help people by showing them how to log on, how to get a MyGov account and how to use Centrelink online services. It frees up our staff, as with the health one we've been talking about, to do the more complex work helping customers back in the office.

Senator WATT: When were those front-of-house people first engaged as labour hire?

Mr Jackson: The exact date I would take on notice, but I'd say it's been in place for about three to four weeks.

Mr Jackson: It's a pilot to trial. I think we're trialling it for about two to three months to see how it goes. Then we'll review how well we believe it has gone with regard to performance. Equally, I was in Western Australia recently and I met with a number of these people, including the site managers at four of the sites. Certainly, the staff have received the additional resourcing to trial them there very well. They think it's a good idea to bring this through. Certainly, the people who are working in there and our staff don't regard them as second-class staff members; they just see them as staff members there to help and they're very appreciative of it.

Senator WATT: Did you say a two- or three-month trial, or three- or four-month trial?

Mr Jackson: I think there are about 30 separate locations. There's one person in each location.

Senator WATT: One person in every location. If the trial is deemed as successful and is extended, has any consideration been given at this point to whether the people who perform those roles would be engaged as labour hire or direct employees of the department?

Mr Jackson: That would be on outcome of the trial. But it would be consistent with the secretary's other responses. This work allows us to free up the more highly trained people we have to do the processing and more detailed work, as opposed to, 'Here's a user logon and here is how you come through.' It would fit into the same category of a blended workforce to free up greater resources elsewhere.

Senator WATT: Again, depending on the outcome of the trial, I wouldn't imagine that you'd engage people to do that sort of work on a temporary basis. That would be something where there would be an ongoing need to assist customers as they come through your offices to use the self-service counters. Is that right?

Mr Jackson: It is an ongoing requirement. Having said that, though, it doesn't necessarily always have to be the same person.

Senator WATT: Yes. The justification we've been given for the Hobart labour hire is that this is a relatively short-term piece of work that isn't going to exist down the track. And we can have an argument about that, about whether that's appropriate or not. But with this kind of work that you're talking about, it would seem to me that there's going to be an ongoing need to assist customers in the offices; so why would you go down a labour-hire route rather than employing people directly to do that?

Ms Leon: All that will be what we think about when we decide what to do after the conclusion of the trial.

Senator WATT: The argument about it being quick, convenient and flexible doesn't apply as much if we're talking about an ongoing function, does it?

Ms Leon: No. There are a range of reasons for why you'd use different forms of employment and we'll take all that into account when we review the way the trial works out and what we might do going forward.

Mr Jackson: And, equally, given the enhancements coming down with the delivery modernisation work and the desire to have as many people as possible doing work online and not actually coming into the sites, we're seeing reduced foot traffic and so the need for the number of these could change. All of these are variables which, as we said, will be considered.

Senator WATT: So we now have labour-hire staff working in 30 locations across the country, assisting people to process their Centrelink and Medicare claims—

Mr Jackson: No. They do no processing—

Senator WATT: Well, I'm not saying that the staff are processing, I'm saying they're assisting people who walk through the door to self-process their claims, if you like.

Ms Leon: They're helping them. They're showing them how to log on and how to get a MyGov ID, for example.

Mr Jackson: It's very basic.

Senator WATT: Which is something that was done previously by direct employees of the department, over the counter?

Ms Leon: That's right.

Mr Jackson: At a much higher level—

Senator SINGH: Even though they're not APS employees, are they still required to comply with the APS Code of conduct and Code of Ethics for employees?

Mr Jackson: Yes.

Ms Leon: Yes. They're subject to all of our expectations for our own employees. And, as I think we've canvassed here before, if there is any failure by labour-hire staff to comply with the expectations of the workforce we would take that up very actively with their employer, and expect pretty rapid action to be taken.

Senator WATT: I think you said that these labour-hire staff started about three weeks ago?

Mr Jackson: I believe that's correct, yes.

Senator WATT: Leaving aside the IT contractors and people like that who you bring on from time to time for particular projects, for the core functions of the department are there any other labour-hire workers who have been engaged in, say, the last six months?

Ms Leon: I think I said that we have about a thousand doing compliance work. That's a core function of the department.

Senator WATT: Which is checking on people, whether they've made an accurate claim and that kind of thing. Again, how long ago did you start that compliance work being done by labour hire?

Ms Leon: Around the beginning of this calendar year.

Senator WATT: So since the beginning of this calendar year there have been a thousand people engaged as labour hire—

Senator WATT: And that was in addition to existing direct employees who were doing compliance work?

Ms Leon: That's right.

Senator WATT: Do you know how many direct employees you have doing compliance work?

Ms Leon: We might have that here. We have substantially increased our compliance work, as you know. We're doing 10 times the number of compliance reviews as we used to, so this is an additional workforce on top of our usual workforce.

Senator WATT: I'm conscious that we've had a fair go so I'll try to wrap this up quickly.

Senator WATT: It's a can of worms that keeps opening up! Since the beginning of this year, the department has engaged about a thousand people through a private company—

Ms Leon: Several—two companies.

Senator WATT: Well, through several private companies, to check up on people's Centrelink—

Ms Leon: To identify whether there are discrepancies between the income they've told us they earned and the income they've told the tax office they've earned.

Senator WATT: Okay, so particularly around Newstart and other benefits?

Ms Leon: Yes.

Senator WATT: Okay. So since the beginning of this year the department has engaged about a thousand people through private companies to check up on benefit claims; there are now 30 people around the country engaged through private companies to assist people to make claims in Centrelink offices; we've got up to 10 people engaged by through private companies in Hobart; and we haven't even got to the contracts that have gone to Serco for call centres—most of which I think has happened in this calendar year?

Senator WATT: And are there any other big categories that I've missed for outsourced or labour hire?

Ms Leon: The minister announced, some time ago now I think, that we're in the process of onboarding some additional outsourced service providers, which are Concentrix, Datacom and Stellar. They are progressively onboarding more workers, but at the moment I think we're only up to a few hundred from those contractors.

Senator WATT: That's separate to the Serco numbers we were talking about?

Senator SINGH: Is that because it was 1,250, wasn't it, that you were getting up to with the outsourced call centre workers?

Ms Leon: The announcements that have been made are: 250 initially for the pilot with Serco, another 1,000 equivalent operators that were announced by the minister on 23 April and up to 1,500 that were announced by the minister on 8 August.

Senator WATT: Would you expect most of them to be on board by the end of this year?

Ms Leon: No. It will take a little bit longer than that. I think we're expecting that most of them will be on board by April next year.

Senator WATT: Over the course of this calendar year then, whether we're talking about people engaged through outsourcing of call centres or people engaged in front of house offices or through compliance activities, your department will have engaged roughly a couple of thousand extra people through private companies rather than direct employment?

Ms Leon: That's right.

Senator WATT: If someone's sitting outside watching this how can that be seen as anything other than the wholesale privatisation of the services of this department?

Ms Leon: But they are subject to our supervision as to the performance of the services. They are done to our specifications. They are required to deliver the outcomes that legislation sets for the handling of customer claims. They are conducted on our systems using both the electronic and the data supervision of our own IT—

Ms Leon: They are provided by people who are employed not by the public service, yes.

Senator SINGH: If I go into Centrelink in Hobart and there's a worker that I engage with on the self-service desk, they may look like a government public servant—I presume they wear the same clothing and identification as the rest of the Centrelink public service workers—but they, in fact, are not public servants. They're not a government public servant.

Ms Leon: That's correct.

Senator SINGH: How is that anything but creating a second-class workforce within the public service?

Ms Leon: They are completely working on equal terms with our own staff. They are not—

Senator SINGH: You can't even tell me what they're employed as. How do you know that? You can't tell me what their salary is.

Ms Leon: As you said, they're not wearing a separate uniform. We don't put a sign on them saying, 'not with us'.

Senator SINGH: But it's about their worth as an employee and you can't even tell me what they are paid, what their conditions of employment are.

Ms Leon: They're required by the contracts we have with labour hire, they must be employed in accordance with Australian law, meaning they have to be employed under either an award or an industrial agreement.

Senator WATT: They're not necessarily being paid the same rates and conditions as they would be if they were direct employees of the department are they?

Ms Leon: We are engaging staff by other means so that we can continue to provide the service that customers want.

Senator WATT: Minister, what on earth is the point of reducing the funding to departments for them to employ people on a direct basis, as has happened year after year after year—even just in the last financial year, with you providing funding for 1,200 fewer direct employees—when, as Ms Leon says, to meet people's service expectations, you've now have to go and hire even more people through private companies? How on earth is that benefitting taxpayers?

Senator Fifield: I think the secretary has indicated that, in the case of those in Hobart, this is short-term work.

Senator Fifield: If I could complete a sentence, that would be appreciated. As the secretary said, in Hobart, those people are engaged on tasks which won't be there beyond the short-term. From what I heard Mr Jackson say, in other places where there are staff who are engaged, in some of those circumstances, the department is assessing what the best mechanism will be for providing those particular services—whether it will continue to be by way of an arrangement of engaging people on those sorts of arrangements or whether the department will look to have those roles onboarded. So, I think the department is adopting an appropriately flexible approach. They're not, in any way, being what someone might term taking a philosophical approach or an ideological approach; they're just taking a very practical, sensible business-like approach.

Senator WATT: The two examples you just gave us account for 40 of the 2,000 or so privately engaged staff over the last 12 months. How is it benefitting taxpayers to cut the number of direct employees in one financial year by about 1,200 only to engage—let's leave out your examples—about 1,960 people through outsourcing, labour hire or privatisation? How's that benefitting people?

Senator Fifield: The approach that this government takes, and which the government expects the department to take, is to be the best possible steward of taxpayer money that they can.

Senator WATT: But, you're not. You're spending probably more. You're hiring more people through outsourcing than you would be by maintaining your staffing numbers.

Senator DEAN SMITH: I'm interested in seeing this in a broader historical context. I'm wondering if you've got some data that might take us back six or seven years. I'm not disputing what Senator Watt is saying, but I'm more interested seeing the historical trend over the medium to longer term. When was the department established? Was it 2010?

Ms Leon: In the 2010-11 year, yes.

Senator DEAN SMITH: Are you able to give me a sense of what the ASL increases or decreases have been in each of the financial years since the creation of the department?

Ms Leon: These are just figures from our annual report. In the 2010-11 year, when the department was established, our ASL was 34,973. In 2011-12, it was 32,592, which was a reduction of 2,381. In the 2012-13 year, it was 31,795, which was a reduction of 797. In the 2013-14 year, it was 30,089, which is a reduction of 1,706. In the 2014-15—

Senator DEAN SMITH: And then the government changed at the 2013 election. That's my commentary, sorry, not yours.

Ms Leon: In 2014-15, it was 29,711, which was a reduction of 378. In 2015-16, it was 30,197, which was an increase of 486. In 2016-17, it was 29,837, which was a reduction of 360. And I think we've now dealt with 2017-18 and 2018-19.

Senator DEAN SMITH: This won't be in the annual report, but in my quick calculation under the tenure of the previous Labor government there was a reduction of 4,880 or 4,890—my maths is not as strong as others—and in the period from 2013, the election of the coalition government, 2016-17, there's been a reduction of 2,840 or 2,850. So the bulk of the reduction, almost twice as much, happened under the Labor administration.

Senator DEAN SMITH: Thank you, Secretary; you just gave us the last headcount figure. It was 29,837.

Ms Leon: That was in 2016-17. And, I think, in 2017-18 I had said that our actual ASL was 28,521. But I haven't got the calculation of that reduction.

Senator DEAN SMITH: I think that makes a very powerful point, that the largest reduction in ASL count happened under the Labor administration—almost twice as much as the headcount reduction under the coalition. So if you were generous, you'd say that all the heavy lifting, in terms of cutting staff at the DHS, was happening under the Labor administration. Thank you, Chair.

Senator SINGH: Minister, do you see a distinction between the employees employed by the labour hire working in, say, Centrelink, and those APS staff?

Senator Fifield: I don't see a distinction, in terms of the value of their contribution to the workplace.

Senator SINGH: Ms Leon said if labour hire staff performed outside of the Australian Public Service Code of Conduct Centrelink would talk with the labour hire staff's employer. That's a clear distinction between what would happen to an APS public servant, if they fell outside the code of conduct, compared to a labour hire staff—

Ms Leon: They would both be subject to appropriate disciplinary action by their employer. In one case it's the labour hire.

Senator SIEWERT: I want to go to the telephony reports. Can we take it that you've tabled the telephony report?

Ms Leon: I can see that we were very helpful by providing it to you in advance, but I'm happy to have it properly tabled.

Senator SIEWERT: Yes, you were, and it's much appreciated. It saves us a lot of time. Thank you.

Ms Leon: So has the secretariat for the committee got those for the rest of the members?

Senator SIEWERT: Yes, everybody's got a copy, thank you. I want to ask some questions about it. I notice there has been a drop in the overall number of calls to the social security and welfare-particular lines. I presume that's a response to the work you've outlined in previous estimates that was being undertaken.

Ms Leon: We expect that the number of people calling us and the number of people coming in to service centres will continue to decline, going forward, as more people are able to self-serve and conduct their business online. There is also another factor impacting on the number of calls, and that is that we have—as we outlined here on another occasion—reduced the number of calls needing to be transferred from one service officer to another by upskilling our staff to answer the whole call where possible. Previously, if you called Centrelink, your call would have been answered by a customer service officer who would have dealt with part of your question and then transferred you to someone else to answer another part of your question, which counted as two calls. Now your call will be answered by someone who, hopefully, will answer your entire question, and that will only count as one call. So it's still the same amount of customer service, but it will come up as a smaller number of calls because you got your matter resolved by the first person you spoke to.

Senator SIEWERT: Thank you. I noticed that the calls are down. Probably one of the highest levels that had been reached was in September last year. For the quarter there were 18,240,979 busy calls. Comparing like with like, this quarter we got nearly 11 million.

Ms Leon: Yes. There's been a substantial reduction in busy signals, and we attribute that to all the work we have been doing to improve the telephony system as well as the onboarding of additional service delivery positions. Mr Jackson might want to add to that.

Mr Jackson: If we compare it year on year—the senators asked us this last time—year to date is at 30 September 2018 compared to the same time last year. The average speed of answer has gone down 48 seconds. The number of busy signals has gone down 7.2 million. I'm rounding. The average speed of answer for the disabilities line has gone down 5 minutes 54 seconds. These are all reductions. Employment services has gone down 9 minutes and 34 seconds. Families and parenting has gone down—

Senator SIEWERT: While I appreciate that the calls have gone down by seven million over this period, we're starting from a pretty high base. I heard what you said about reducing it but—

Ms Leon: We're going to continue to reduce it.

Senator SIEWERT: Hopefully. But, if you times that by four, that's still around—sorry, that was just for the quarter, isn't it?

Mr Jackson: Correct, for the three months.

Senator SIEWERT: So, if you times it by four, you're up around 40 million busy signals for the year.

Ms Leon: We hope we are going to continue to drive it down. We haven't finished yet.

Senator SIEWERT: I take your point. But we thought it was high when we were getting to 22 million and that was 2014-15, so we still have got a significant way to go.

Ms Leon: Yes, Senator.

Senator SIEWERT: It reached a really high peak. Although we're celebrating—and as I said, it's good to see that it's come down—but I'm sorry if I'm not popping any party poppers yet.

Ms Leon: We aren't giving up on it. We're going to continue to drive it down. We aren't considering this a mission accomplished.

Mr Jackson: As you have worked out, Senator, year on year for a full year we dropped 7.4 million for 2017-18 to 2016-17. We've dropped another seven million in the first quarter of this year, bearing in mind that the first quarter is always the highest because of the seasonal peak—

Senator SIEWERT: There's a data point that I would just like to double check. Does that mean there are now no busy signals on employment services?

Mr Jackson: For the first quarter there were no busy signals.

Senator SIEWERT: And the speed of answer was about 20 minutes, give or take eight seconds—18 seconds.

Mr Jackson: That's correct. Down 9½ minutes from the previous period; so it's about 20 minutes.

Senator SIEWERT: I'm particularly interested in youth and students, and the older Australians. Older Australians dropped but it's still nearly 22 minutes. Youth and students hardly dropped. It dropped 21 seconds. There's still a very high number of busy signals and there are fewer answered calls, from last year, which isn't made up just by the drop in the number of—in fact, the number of successful calls has dropped.

These are the two areas where we have a significant number of complaints—I'm sure the others are getting it as well. I certainly am—in terms of the number of the time it's taken to process youth allowance and the time it's processing now for aged care. Are these two interrelated?

Ms Leon: I doubt you'll be getting any complaints about youth and student, at the moment—

Ms Leon: There was a seasonal peak for students and we did have some complaints at that time, but I think you'll find that youth and student claims are—for youth allowance, student, we are currently reaching 95 per cent being processed within KPI against a target of 80 per cent.

Ms Leon: For youth allowance, jobseeker, I can tell you that the median—I haven't got the number of claims on hand—days to process in 2017-18 was 18 days, and median days to process in the first quarter of this year, up to 19 October, was six days.

Senator SIEWERT: I'll come to the age pension in a minute. Can I go back to those two lines, please, in terms of where there's still a high wait, the wait time. The number of busy signals is still high and the wait time is high compared to the others. Is there a reason that those lines are higher? Are there fewer people on those lines? Are they more complicated?

Ms Brill: We are continuing to reduce busy signals across all our lines. In some of our areas, where there are major peaks, that's a little bit more challenging. But if I could share some data, noting that you've had a long historical relationship with busy signals over the past few years, we had 397,000 busy signals in youth and students in October 2016. In 2017 we reduced it by about 120,000 and we've reduced it again this October. While we haven't finished the month yet, it's only 123,000 busy signals. We are seeing year on year and, in fact, month on month it is compounding the work we've been doing on telephony optimisation to improve the functionality of the platform and to ensure that the call is being resolved when the caller speaks to an officer. That's again why you're seeing successful calls start to drop. You'll recall that, when we talked about this last year, every time we transferred it counted as a successful call. We are now transferring less than seven per cent of our student calls. We used to transfer 25 per cent. That's why you'll see that trend in successful calls slightly dropping, but also our busy signals year on year have still come down on students, albeit not as much as in some of the other queues. We continue to work on that and we'll have a better news story to tell you next time we meet.

Mr Jackson: Equally, as you'd expect with that very low volume of claims on hand, the number of complaints has substantially reduced, the number of people coming into service centres has substantially reduced and the number of calls has substantially reduced. That is a direct result of that.

Ms Leon: There were more claims on hand over standard than we would have liked.

Senator SIEWERT: Can you please take on notice then for each month since the beginning of this calendar year how many student claims you had each month and what you were clearing?

Ms Leon: Yes.

Senator WATT: One thing I have noticed—and it's good that the successful calls are going up et cetera—is that there has been a really significant fall in the number of calls overall that you're taking, hasn't there?

Ms Leon: Yes, but that is because we used to count every call that was transferred as another call. If you rang up with a question, we might transfer you twice and that would count as three calls. Now when you ring up the first person might speak to you for longer but deal with all of your questions at once, and that will count as only one call. It's still the same amount of people ringing us and getting their questions answered. It will look like there are fewer calls, yes.

Senator WATT: All I'm saying is that, before we get too excited about the reduction in the number of busy signals, we should actually also notice that the number of incoming calls has also fallen by several million.

Ms Leon: Yes, but the average handle time has increased, so the amount of time we're spending on the phone with our customers has increased per call because we're spending longer with that customer answering their whole question in that call. So the number of calls is not probably the right metric for the amount of customer service. The number of calls multiplied by the average handle time will tell you the amount of customer service.

Mr Jackson: Equally, I think we're now getting through a lot of the call survey work we're doing. Something like 83.5 per cent of the people who ring us are getting first-contact resolution, so they ring once, get their answer and don't have to ring again. That's what we're aiming for. I understand your point, but a reduction in incoming calls is also not a bad thing. We've often said that you cannot look at any one set of data in isolation because of the intricacies between how they all impact on wait times, handling times, satisfaction, resolution, effort et cetera. It's a very complicated beast.

CHAIR: Thank you. We'll now have a break of 15 minutes.

Proceedings suspended from 21:15 to 21:32

CHAIR: We now resume the meeting. Senator Siewert has the call.

Senator SIEWERT: I want to quickly go back to the calls and older Australians line. Actually, before I go there, I've got a series of questions about pension and a couple of constituent issues. In terms of the other line, where income management and the BasicsCard are, does the average speed of answer of six minutes 43 seconds apply to the income management line? That call wait time has gone up very significantly.

Ms Brill: The wait time's gone up around about 2½ minutes or two minutes 50 seconds, and it does also include income management as well as myGov, Australian victims of terrorism, emergency response, international services, et cetera.

Senator SIEWERT: This is a general call about income management. Does it include the one where people are checking their balances? There are two lines, or there used to be, as I understood it. There was the general inquiry line and then there was the balance checking line.

Senator SIEWERT: One of the areas that you did used to respond fairly quickly to was the balance line. That's changed, has it?

Ms Brill: The ASA is variable. At the moment, it is about two minutes longer than it has been previously, but it is variable and it's still well within our expected target.

Senator SIEWERT: Are those still the types of calls that are coming from mobile phones in remote communities?

Ms Brill: We can't tell what percentage of calls come from mobile phones or from landlines, unfortunately.

Senator SIEWERT: It's highly likely that those calls are coming from mobile phones from people in remote communities.

Ms Brill: We also know that people in remote communities make good use of our agents and access points, of which we've just increased the number of phones that are in those agents and access points for people in remote areas to use.

Senator SIEWERT: Because this is a conglomeration of a number of lines or areas of inquiry, are you able to tell me how many relate to the BasicsCard and income management?

Ms Brill: I'd have to take that on notice.

Senator SIEWERT: If you could, that would be great. Can I go to older Australians more generally and the age pension. I've had a number of constituents raise their wait times directly with me. There's also been some media in WA, which you've probably seen. Can you tell me now where we're up to in terms of the processing time? You would have heard the discussion we had with DSS this morning.

Ms Leon: The first thing we should put on the record about age pension processing, including some of the cases that have been in the media, is that people do have to provide us with all of the information about their financial situation before we can process the claim. People do sometimes go to the media and say, 'It took six months to get my age pension,' but quite often it was only at 5½ months that they finished giving us the information. The age pension is one of our more complex claim types where people do have to provide a lot of information about their assets, and people often have quite complicated financial circumstances to be resolved before they will fit within the income and assets test. So I think it's always worth just testing, when people say, 'It's taken six months to get my pension,' how long it's taken from when they finished providing all of the information.

Senator SIEWERT: I appreciate that. However, I've never had so many older Australians contact me about the age pension in the whole time that I've been in the parliament.

Ms Leon: So, in terms of where we are at the moment, there are about 23,000 claims on hand. Of those, only 17,600 are actionable in the sense that we've got all of the information that we need. Of those, less than 5,800 are over the KPI, and we're currently processing 4,300 claims a week. So you can see that, in only a little over a week, we would get through 5,800 claims.

Ms Leon: But, in any event, there are only 5,800 actionable claims that are over the standard, and we're currently processing over 4,000 claims a week. So that's really a week and a bit of work.

Senator SIEWERT: Can you do the same thing for me over this year in terms of what I've asked for for youth allowance student? Can you give me each month this year for how many claims—

Ms Leon: Were on hand?

Senator SIEWERT: That were on hand—thank you. Can I just go to this issue that you raised. You need to have all the data. Can I just say it's not just my office that's been getting above average—in terms of aged care, I haven't had as many—

Ms Leon: I think we've taken it on notice to give it to you month by month. I have where we're at now, which is a very substantial reduction in over-standard claims. As I said, there are now only a very small number, in processing terms, of claims that are over standard, and we expect by the end of the month to have all actionable claims processed within the standard.

Senator SIEWERT: So we had youth allowance and age pension over standard. Why was that?

Ms Leon: In relation to age pension, one of the factors that have impacted on that is that, as you know, there was a six-month delay in when you got eligibility for the pension due to the fact that, every two years, the age at which you're entitled to the pension goes up.

Ms Leon: So there is a kind of unmet demand—a backup of demand of all the people who would, in the normal course of events, have been able to lodge in July. They're all kicked over to lodge in January, so we get a spike of people, and this will happen every two years. Our models about how we plan and staff for the workload are not quite working for age pension when we get that six-month delay, so we will have to rescope our workforce planning for the next time that happens.

Senator SIEWERT: Okay. It's not as if they wouldn't be applying; they're just applying six months later.

Ms Leon: I know, but then there are more of them.

Mr Jackson: In one month, we would normally have 7,000 submissions. We saw 15,000. We saw that for three months in a row: basically, the number of claims that came in was almost double.

Ms Brill: Correct, and then we had an inflow for a number of months which was 70 per cent higher than it normally would have been. As the secretary said, it's very difficult for us to forecast against that, and we obviously need to work a little bit harder in making sure that we meet that really big spike when that change occurs, if it occurs.

Ms Leon: The next time it happens, we will have some data to go on and we'll be better able to anticipate the demand.

Mr Jackson: We mentioned earlier too that we do monitor all complaints and analyse them. As a result of a major focus, particularly on those claims that were out of standard, we actually have a specific taskforce working on that now where we have physically reviewed every one of the claims that are outside of standard. We have also put into the system a reminder to follow up proactively with the claimants after 14 days to say: 'You should have given us something by now. Why haven't you?' As a result of the work and the processing, we've seen a 40 per cent reduction in customer complaints since July this year. So, between July and September, we've seen a 40 per cent reduction in age pension complaints. It is recognising that there was a problem, because we didn't quite anticipate the full extent of the backlog, but certainly there are strategies we've put in place. Equally, translating, we've seen about 6,500 fewer people come in for face-to-face inquiring about their age pensions. So, whilst there has been a consolidated number of complaints in that period due to the compressed backlog, we're confident that the work we're now doing, with the resources we now have in place, is going to clear. The current aim, albeit in six days time, is to have no claims over 70 days.

Ms Leon: None over standard. All the actionable claims will be processed within standard, which is 49 days.

Senator SIEWERT: Effectively, it appears from what we're told that there are various mistakes being made, and it sounds like they're on the part of the agency. For example, a person had to leave their studies to take on a carer role so they informed the department and the department didn't action him being cut off from Austudy.

Ms Leon: I don't know the case that you're talking about. If there are individual cases that you want to refer to us—

Senator SIEWERT: The point being, we are obviously the ones that get all the complaints from—

Ms Leon: We get some as well.

Senator SIEWERT: I'm sure you do. They end up with us when you don't address them.

Ms Leon: When people complain to the department, we always look into their circumstances and undertake service recovery, if we have made a mistake. I should say that sometimes when we do look into it sometimes we haven't made a mistake and the customers just don't like the outcome, but we always do investigate people's complaints and seek to resolve them. If we have made a mistake, then we certainly go back through our systems to see whether we need to change our scripts or change our training or change anything about our processes so that that won't happen again.

Mr Jackson: And whenever a customer has identified as being in financial hardship, that claim is absolutely prioritised throughout the system—where they have identified.

Senator SIEWERT: I've got a number of questions here, some of which relate to homelessness and carer payments. Someone's application for a carers payment hasn't been processed for a year. He hasn't had a result for a year. He did the right thing and notified the department about Austudy, but he then still got paid a couple of payments. They raised a debt against him.

Ms Leon: It's difficult for us to respond to this without having the information about the customer.

Senator SIEWERT: Fair enough. The problem is that this is a student who stopped his studies to become a carer, but his carer payment wasn't processed and now a debt team is on him.

Ms Leon: If you want to refer the details of the customer to us, with their consent, we're happy to look into it and see if there's any rectification that we need to undertake. I should say, in relation to carer payments, in 2017-18 the median days to process was 43 days. If someone hasn't had their claim processed for a year, then it's possible that we're waiting for information from him or from third parties. But it's difficult for us to respond to it without knowing who the customer is.

Ms Leon: If you would like us to look into it then, perhaps with the customer's consent, you could share their information with us. We're happy to see what we can do.

Senator SIEWERT: Yes. I've got to say, about the work, when we've been following up some of our constituents' complaints, they've been resolved very quickly.

Ms Leon: Yes.

Senator SIEWERT: But customers shouldn't have to come to us to get their complaints resolved.

Ms Leon: They're welcome to come to us. We have—

Senator SIEWERT: Of some of the complaints we've had, they have been to you and they didn't get anywhere.

Ms Leon: If you can refer those to us, we're happy to look into why that might have been so.

Senator SIEWERT: I'll follow that up and find out why it takes a politician to make a phone call.

Ms Leon: I can assure you there are plenty of people wo contact us and we resolve their complains. Mr Jackson, I'm sure, could take you through the volume of complaints that we receive and the resolutions that we achieve. We appreciate the work that our elected representatives do to respond to constituent concerns, but we certainly don't expect that that is the only way that a person should get their complaint resolved. We receive complaints from a range of sources, including directly from customers, and people do get a very high resolution rate when they contact us.

Ms Leon: If they're not entitled to the payment that they're seeking, they will get a no. As we canvassed before, sometimes people aren't happy with the outcome of an application, if they're not eligible for the payment. We can't always promise that people will like the outcome. As we canvassed before, people sometimes aren't happy with the outcome of an application if they're not eligible for the payment. So we can't always promise that people will like the outcome.

Senator SIEWERT: I know I'm going to get pinged in a minute. Do you still have the grandparent adviser positions?

Mr Jackson: Yes, we do.

Senator SIEWERT: Thank you. That's resolved one of my questions very quickly. Can I go to DSP very quickly. I've got about five minutes worth here on DSP. I'm not necessarily finished, but I'll cede, of course. In terms of DSP, we had a discussion this morning with DSS around the issue around treatment and stabilisation of people's conditions. I've had a constituent asking me about a particular issue, but I wanted to ask about a broader issue. Obviously I want to see that person's issue resolved, but I specifically want to ask you about the stabilising issue and if somebody is in treatment or if they've refused treatment.

Ms Deininger: I might take the question about stabilisation of a condition first, if I might.

Ms Deininger: Under the DSP rules, in broad terms, a person needs to have 20 points under the impairment tables and they also need to not be able to undertake 15 hours of work a week over the next two years. Their condition must be fully diagnosed, treated and stabilised. In terms of the stabilisation of somebody's treatment, I think the discussion earlier today was that people may have episodic conditions that may ebb and flow, which I guess means that the condition is not stable in the sense that it is always the same every single day. From our perspective, in terms of assessing someone for DSP, just because they have a condition which ebbs and flows does not mean that they can't meet the criteria for being unable to work 15 hours a week and aren't able to meet the 20 points in the impairment tables.

Ms Deininger: Even if their condition ebbs and flows, because it might be sufficiently difficult condition or arduous condition, it means they are able to still meet the eligibility criteria for DSP.

Senator SIEWERT: Yes. Okay. What I'm hearing from people is that that is used as a reason why they're not getting DSP.

Ms Deininger: Well, it might be that the condition is not—there may well be some conditions where, based on the assessments of either the job capacity assessment that they undertake through the DSP eligibility process or the government contracted doctor medical disability assessment, there's a medical assessment that it isn't stabilised. It's hard to comment specifically. As the secretary said, I'm happy to look at individual cases, but certainly, as a general concept, the fact that somebody's condition ebbs and flows does not of itself preclude people from being on DSP.

Senator SIEWERT: Okay, thank you. I'm almost at the end of my five minutes. Can I specifically ask about if somebody's refused treatment because they don't think that the treatment recommended is appropriate. Is that, by and large, in and of itself a reason why somebody could not get the DSP?

Ms Deininger: Again, in relation to DSP, there will be some circumstances where a person may refuse treatment. There's provision where, for example, a person is terminally ill and they may make a decision in their circumstances, with their family and their medical practitioners, to forgo treatment. There is also scope under the rules if somebody, for example, has an objection to a blood transfusion that they are able to say for particular religious or cultural reasons that they won't undertake that particular treatment. So there is scope for people to say, 'I don't want to undertake this treatment for particular reasons,' but it's hard to say exactly how that rule will apply without knowing the individual circumstances.

Senator SIEWERT: So there's no blanket where, if you refuse a treatment, that means you automatically can't get DSP?

Ms Deininger: That's right. In fact, there are certainly explicit circumstances where you can refuse treatment.

Senator SIEWERT: In that case, from here I will take up a couple of specific issues with you separately or through our liaison officer now that we have clarified that. That will make that process a lot easier, I think. Thank you.

Senator SINGH: Ms Leon, how many consultants or contractors—whichever you call them—are in the Payments Reform group of DHS?

Ms Leon: Just one moment. I may have to get someone else to the table. I'm not sure if I have it broken down by group in front of me.

Ms Leon: In relation to Payments Reform group, last year they were engaged in tranche 2 of the Welfare Payment Infrastructure Transformation. This year it's a whole new body of work because we've now been funded to do tranche 3, so there might well be a significant difference in the workload, both overall and as to contractors, because it's not a steady state. It was delivering one whole package of work last year, and now it's commenced a whole new package of work.

Mr Murphy: That's a mix. I should be clear that those 166 contractors do relate to the Welfare Payment Infrastructure Transformation program.

Senator SINGH: Yes, I understand that; they are doing IT and non-IT work within that Payments Reform group. What are the salaries of those contractors?

Mr Murphy: The contractor cost for tranche 3 of the WPIT program, 1 July to 31 August, was $8.411 million. For tranche 2 of the program, 1 January 2017 to 30 June 2018, it was $76,346,000—I'm rounding. Contractor cost for tranche 1 of the program, which was 1 July 2015 it to 30 June 2017, was $72,314,000.

Senator SINGH: What does that work out to be per contractor? What are they earning?

Mr Murphy: I'd need to do the maths.

Ms Leon: Also, it wouldn't have been a steady state number of contractors for the entire period of the tranches, so we would have to take that on notice.

Senator SINGH: But there are currently 166 contractors, so I'm interested to know what their salary is.

Ms Leon: But dividing that by our total contractor cost won't tell you what their salary is, because we haven't necessarily had all—

Mr Murphy: That does not include the CIO group, our chief information officer group, or other services such as training, recruitment, market research. Call that 'business contractors' as a generic description, as compared to IT contractors.

Senator SINGH: What is the range of salaries for these business contractors?

Senator SINGH: How is the arrangement made when the government signs up these deals it does to get in contractors? You pay $8.4 million when you're not aware what they—

Ms Leon: We're aware of it. We just don't have it at the table.

Mr Murphy: We don't have it with us. Similar to the labour hire conversation, some of these contractors could be engaged through firms that provide specialist services, where we bring contractors in that are employed by other firms. It is similar to labour hire.

Senator SINGH: This is another kind of layer on top of what we already heard earlier about the outsourcing.

Ms Leon: What we are doing in payment reform is not the normal and core business of the department. It's a temporary body of work in which we are fundamentally transforming the nature of the department's business processes and IT systems, and so we have engaged on a short-term basis a range of specialists to help us with that work, who we wouldn't expect to need a few years from now, when we've completed the transformation. It is unusual. It's not the normal operation of the department payments reform group. It's a temporary project.

Senator SINGH: I understand it's reform, but it is a lot of money. It is millions and millions of dollars.

Ms Leon: We are operating a very large and complex system.

Senator SINGH: I think it would be good to know how much people are being employed, because again these are jobs that you have chosen not to recruit from within. You've outsourced them.

Ms Leon: The reason for that is that, of course, this is not ongoing work of the department. This is a temporary transformation program while we fundamentally redo our business processes and systems.

Senator SINGH: Please take on notice the salaries of the 166 contractors in that payment reform group.

Mr Murphy: As the secretary said, in most cases we are bringing in capability to help deliver the program, and that capability does not currently exist within the department. What we've been doing not only is ensuring that we can take the program forward but is essentially building skills within the department by having the contractors upskill our workforce—so leaving behind capability.

Senator SINGH: I'm interested in what people are employed, because this is taxpayers' money. That's the thing you haven't been able to tell me from your big folder tonight.

Senator WATT: I've just got a few questions about the age pension as well, building on what Senator Siewert has already covered. What is the department's performance criteria for claims processed within standard? Have I expressed that correctly?

Ms Leon: Yes. We might get Mr Jackson back to the table.

Senator WATT: The question again is: what is the department's performance criteria for claims processed within standard? We are talking about the age pension.

Mr Jackson: The KPM we have within the department is 80 per cent within 49 days.

Senator WATT: So, it's 80 per cent within 49 days for someone lodging an age pension application—that it's processed and a decision is made?

Mr Jackson: The differential here is that should someone make an appeal against the decision—that is, they were rejected and they appeal—then the time for that appeal to be assessed would also, theoretically, go into the original 49 days, which clearly makes it quit challenging.

Ms Leon: It's not considered finalised until the final decision is made, even if that's at the AAT a year later. It's not finalised until then.

Mr Jackson: Equally, as we've said a number of times, should a claim come in on day 1 and we go back on day 5 and say, 'You forgot to provide some information about your bank account details,' and they come back to us on day 65 with that information then clearly we are outside of the KPM already.

Ms Leon: No. We are looking at the standard, in terms of whether it's the right measure, because, as Mr Jackson set out, it includes, as the number of days we've taken to process things, whole chunks of time that aren't within our control. It's a bit of a rough and ready measure of performance because, for a considerable number of the claims that we get, people haven't even provided all of the information within 49 days, so it's simply impossible to process them within 49 days. In relation to a significant cohort of pensions, there are pensions that are payable under reciprocal arrangements with other countries, where both the applicant and the department are hostage to however long it takes the other country to reply. That can go to months and months and months of waiting for information from another country. So, yes, the KPM hasn't changed. We still work towards it, but there are a lot of factors that make it out of our control as to whether we meet it or not.

Senator WATT: Is the department meeting that standard in respect of age pension processing?

Ms Leon: At the moment, as well as those factors which always affect the pension, we have over the first three months of the year processed an above average number of older claims, because we've been clearing all of the claims that were over standard. So, the performance against the standard will, of necessity, be lower because we've been prioritising the older claims and doing ones that have been on the books for longer. Very many of the ones we've been processing were already over 49 days. But it's an annual measure. It's over the whole year that we measure it, so you expect at the beginning of the year when you're processing claims, many of which are over 49 days, that, by definition, you couldn't possibly meet the standard of doing 80 per cent within 49 days. But, over the course of the year, when we have cleared the backlog and are then processing claims that are newer, the number that's in the 80 per cent within 49 days increases.

Senator WATT: but, if you're clearing the older ones, in doing so there's a new backlog emerging of older ones—

Ms Leon: No, there's not.

Senator WATT: I thought you said that you are not clearing all of the claims within 49 days?

Ms Leon: No.

Senator WATT: There will be a new batch that end up being more than 49 days because you have concentrated on the old ones.

Ms Leon: Not if we keep our processing capability up. While we are processing all of the older ones, we are not just allowing all of the new ones to just sit there and not be dealt with. For every claim that comes in, our practice is to look at it five days after it comes in and to, at that point, identify whether we need to ask the customer for more information. We don't just let it sit there until we have finished processing all of the old ones. We then immediately contact the customer if there is more information they have to provide so that they can get on to that while the clock keeps ticking. If they have then provided all of the information and it is a simple claim that we can process, we do that. For instance, if I can just talk about some of the statistics from recent times—

Senator WATT: I'm sorry to cut you off. We are into our last hour, and we have got a number of other topics that we all want to get to.

Ms Leon: I just wanted to reassure you that we have processed thousands and thousands of claims that are within the first few weeks of arriving.

Senator WATT: Have staffing numbers in the areas of the department that process these age pension applications changed in, say, the last 12 months or two years?

Ms Leon: We have put extra staff onto processing the age pension in the last few months.

Mr Jackson: Since 1 July, 120 additional staff have been targeted to clear the backlog.

Senator WATT: Your annual report from 2017-18 shows that there were 34,000 fewer claims granted for the age pension this year as compared to last year. Why was that?

Mr Jackson: That is for a number of reasons, not the least of which is the complexity of the age pension claims now. A lot of claims are becoming far more sophisticated in people's arrangements, particularly for self-funded retirees. A lot of the claims that are submitted are actually rejected. That actually has a double whammy effect in so much as an applicant will put a claim in and provide the additional information and then we suddenly find out that they have a substantive amount of money in their bank account. That person doesn't respond to additional requests for information, and 140 days go past. In fact, it's specifically on the 49 days. Equally, the claim will therefore eventually be rejected. There is a degree of tyre kicking from the point of view of, 'Am I going to be able to get a pension or not?'

Ms Leon: They're from a range of places. They are people who might be working on some other claim types, but are already skilled in age pension processing. We just rearrange the workforce. The age pension is one of our more complex claims, so you can't easily just take on a new hire and put them straight on to age pension processing. We have had people, for instance, who have since moved to other areas of the department but are recently experienced in age pension, so we have just recalled them from somewhere where they can be spared to be put on to age pension for a few months.

Senator WATT: We talked about that today and you were quit evasive as to when the decision was actually made to dump the policy of increasing the pension age to 70. I see that tonight an article has broken, which says that Mr Morrison was against dropping the policy to raise the pension age to 70 as Treasurer and, in fact, that move to dump the policy began when Mr Turnbull were Prime Minister. Are those reports correct?

Senator Fifield: The Department of Social Services estimates is where policy is discussed. This is the Department of Human Services estimates.

Senator WATT: Even though we finished the Department of Social Services three hours ago, you are now avoiding answering questions about age pensions when we are talking about age pensions in these estimates?

Senator Fifield: What senators should do is ask questions in the appropriate estimates.

Senator WATT: I did that. I suppose what has changed is that some of your colleagues seem to have been talking to the media over the course of the day. This report has only emerged in the last hour or so. What this report says is this particular journalist has spoken to people involved in discussions about dropping the policy to increase the pension age to 70. They characterised Mr Morrison as being against the move, even as ministers questioned whether it was worth the political pain. Is that true?

Senator Fifield: As I indicated in the Department of Social Services estimates, Prime Minister Morrison announced that there would not be the proposition that the pension age be moved to 70 continuing.

Senator WATT: I am well aware of that. I think was the one who pointed that out to you.

Senator WATT: It seems to be pretty highly sourced. It says it was some of your senior colleagues.

Senator SINGH: This morning you didn't outline when the decision was made. We asked that repeatedly and you didn't make that clear. That would have cleared this up. Now it is unclear where the backflip came from. In fact, it clearly wasn't the idea of the Prime Minister, it seems, to start with if he was against backflipping when Malcolm Turnbull was Prime Minister. This could have been cleared up this morning if you were straight with us about when, who and how that decision was made.

Senator Fifield: You are engaging in a range of assumptions and a range of speculation.

Senator WATT: You are using technicalities about estimates programs to avoid answering it now.

Senator Fifield: I was asked questions by you in the Department of Social Services estimates, which I answered.

Senator SINGH: No, what you answered is when the announcement was made, which anyone can look up on the internet. We weren't asking what we already know. This is estimates. We were asking you when the decision was made. It is still appropriate for us to ask it now, because we are still talking about the age pension, regardless of the departments.

Senator Fifield: I answered your questions in the Department of Social Services estimates.

Senator WATT: Did Mr Morrison wait until he knifed Mr Turnbull as Prime Minister before he switched his position on the pension age?

Senator Fifield: I have. I refer you to the Hansard of the Department of Social Services estimates.

Senator WATT: What do you think about the fact that some of your senior colleagues seem to be willing to dump on the Prime Minister about one of his key policy announcements since he became Prime Minister?

Senator WATT: Would it be the former Prime Minister, who is a bit unhappy that Mr Morrison is rolling over on policies that he opposed while he was Mr Turnbull's Treasurer?

Senator Fifield: Senator Watt, you can monologue for the next 40 minutes, if you like.

Senator WATT: I am not monologuing. I am asking you questions that you are refusing to answer—that is not a monologue; that's a dialogue.

Senator Fifield: You are monologuing and you are editorialising and you are entitled to do what you want.

Senator SINGH: Doesn't this show that there is just more division and disunity within this government?

Senator DEAN SMITH: We have a different Minister for Social Services, different government services, different ministers. Senator Fifield is here in a different capacity now. I think you have prosecuted it as best you can, and we should move on.

Senator WATT: We have another topic that, hopefully, the minister is willing to answer questions on and that is farm household allowances. How many people are estimated to be eligible for this support payment?

Ms Leon: I suppose we won't know until they apply, but I can tell you that, on the current rate of application, there are about 3,500 customers who are receiving farm household allowance. If the rate of applications and decisions continue at the current pace, and we don't know if that will occur until it does, we estimate that, by the end of the year, would lead to 7,000 people being on farm household allowance.

Senator WATT: There are 3,500 farmers, roughly, currently receiving farm household allowance and that is essentially an income support payment to farming families?

Ms Leon: Yes, that's right.

Senator WATT: You expect at the current rate by the end of the calendar year you will have roughly 7,000 receiving?

Ms Leon: If it continues at the current rate.

Senator WATT: Do you know how many are estimated to be eligible? What would be the maximum number who might apply?

Ms Leon: We don't really know. We know roughly how many farmers are in drought-affected areas, but there has been a broad range of estimates about how many of them would be eligible because it depends on their individual financial circumstances. It could be as low as 10,000 or it could be as high as 20,000 or 25,000, but we just can't know without them actually applying because it depends on their individual financial circumstances whether they would be eligible.

Senator WATT: So depending on their financial circumstances, it could be up to 25,000 farmers eligible?

Ms Leon: Possibly but given the current rate of applications, we aren't expecting that it will go anywhere near that number. So it may well be that a number of people are simply not applying because they know they won't be eligible.

Senator WATT: How many claims are currently outstanding—so have been lodged and not finalised?

Mr Matthews: At the moment there would be approximately 1,700 applications on hand.

Senator WATT: We have got about 3,500 people receiving it. Their applications are being processed and they are receiving payments.

Mr Matthews: Yes.

Senator WATT: There are about 1,700 others who have applied and are currently being processed?

Mr Matthews: I don't have the figures for the actual rejections, but in the last period following the announcement around the changes to FHA to extend it from three years to four years and provide the additional supplement payments, there have been about 2,547 claims finalised and the granted rates is about 73 per cent and the rejected rate is about 27 per cent.

Senator WATT: So in general terms about 27 per cent have been rejected of claims lodged have been rejected?

Mr Matthews: Yes.

Senator WATT: And when did that change get made to extend it to four years?

Mr Matthews: I haven't the exact date but I think it was made around July.

Senator WATT: Do you know how many of those 1,700 outstanding claims were lodged after then?

Mr Matthews: Not the outstanding claims, no. There will be some claims from there. I don't necessarily have which claims relate to which period.

Ms Leon: In relation to the claims that are on hand there are very few that are sufficiently old to go back before then. For example, there are only 21 claims on hand that are more than 15 weeks old. With half of those we are still waiting on more information from the applicant.

Senator WATT: You would be aware that there has been quite a bit of criticism of the process around the farm household allowance, the complexity of the process and the length of the process? You are aware of some of that criticism?

Ms Leon: First of all, we responded to the concerns of the farming community about the complexity of the process by revising the application form. The form was reduced in length and number of questions by about a third, as a result of work that we did with customers and with their representatives to go through and simplify the question set. To the extent that there is still complexity in the application process, it is usually about the complexity of farmers' financial arrangements. The only thing that makes it complicated is having to demonstrate your assets and income, and if farmers have, as they quite reasonably often do, some complicated financial arrangements then they have to provide evidence of those, and that might be complicated for them.

Senator WATT: As I understand it, the point of this allowance is to assist farming families that are really struggling at the moment. Isn't it a bit rich to be saying the difficulties with processing these applications are due to their own financial affairs?

Ms Leon: No. It is due to the fact that they have to demonstrate their financial affairs. That is the only reason it is complicated. It is not because we have designed a complicated form. It is just because they are the criteria for being eligible for this payment. It is dependent on an income and assets test.

Senator WATT: You don't think, again, that the need to support people outweighs that and something could be done to modify the criteria?

Ms Leon: We implement the policy of the Department of Agriculture and Water Resources, so we don't determine the policy.

Ms Leon: There have been a range of discussions across government about drought assistance and the complexity of the farm household allowance has been one of the things that has been raised with us. We have said the kind of thing I've just said to you, that it's not about the form. We already have simplified the form. The question of whether people ought to receive an income support payment irrespective of their income and assets is, obviously, a policy question relevant not only to agriculture, but to the Department of Social Services in terms of the way that we normally approach income support payments.

Senator SINGH: What did you strip out of the form? If you have already stripped a third of the form out, it can't all just be about income and assets?

Senator SINGH: so much that it has made it very difficult for farmers to access this. You admitted that you had to simplify the form. What is it that you have simplified in the form that has led to a third of it coming out—

Senator DEAN SMITH: Senator Singh is saying that she likes the idea of complicated forms for farmers experiencing the drought—

Senator SINGH: Senator Smith, I don't think you and I need to get into a debate about simple forms.

Ms Rule: Farm household allowance is assessed based on the income of both partners. We previously had two sets of questions that related to each partner. We stripped out some of that double up where possible. We've put some questions up-front that would immediately help you to ascertain whether you were eligible or not, so that some people don't have to go all the way through the process to work out whether they are eligible. We have streamlined some of the questions sets that we've asked to make sure that we are gathering the bare minimum of information that we need in order to make the assessment against the income and assets test, because this is a highly targeted income support payment like all the other income support payments that we deliver.

Senator WATT: Why is it, then, that only two days ago, on 23 October, Mr Alan Brown, the president of the Wagga branch of the New South Wales Farmers Association, was quoted in the Wagga Wagga Daily Advertiser as saying that the feedback filtering back to him was that many people were not sure whether they qualified and that they were finding the application process simply too hard? He said: 'I understand that when you're applying for government money there needs to be a high standard, but some parts of this application process are something else.' If you've reduced the size of the application process, why are these complaints still being made—only a couple of days ago?

Ms Leon: Our understanding is that farmers often find it more complicated than they just have on hand to be able to say what the value of all of their assets is. So, they then need—and the government's funded the financial counselling services—to talk to someone about their finances so that they can better understand how to value their assets and describe their income.

Senator SINGH: Are they required to provide accurate income and assets, or an estimate?

Ms Rule: It's an estimate. It's a best estimate—just as all our other income and assets tests require.

Ms Leon: We're happy to give you a copy of the form, on notice. On the form, for example, you can provide your last tax return. Most people should be able to lay their hands on that and that will show—

Senator WATT: Shouldn't you be able to obtain that through the tax office?

Ms Leon: We don't yet have real-time data exchange with the ATO. We are working towards that—

Senator WATT: I'm having flashbacks from robo-debt. This was one of the problems with robo-debt, wasn't it?

Ms Leon: But it's not real-time. With income compliance we're getting income data from the tax office from some years ago, and I'm sure farmers don't want to wait some years while we get to post end of the financial year from a couple of years ago from the tax office. So, people are asked to provide their last tax return, and that's then their evidence of what their taxable income was.

Senator WATT: Just to give you another example—again, from I think the same newspaper, only two days ago, with farmers' complaints: 'Multiple forms are required, including an original birth certificate. They also need to produce paperwork about income and outgoings. The government's own tax records are not enough to prove eligibility and as a result Centrelink has had to extend their service hours for farmers struggling to make sense of the application process.' That sounds like a bit of a disaster for people who are already in a lot of distress.

Ms Leon: We are—and we're pleased that it's recognised—opening our service centres in drought affected areas on the weekend and teaming up with the Rural Financial Counselling Service to provide that weekend service to farmers to either give them advice or help them fill out the form. We've also re-routed both the mobile service centres—the buses that travel around Australia to take Centrelink services to places that don't have a service centre—to travel through the drought affected areas for the rest of the year to provide as much support as we can.

Ms Leon: It's about income and assets. The tax record will tell you about income, and that is one of the pieces of documentary evidence that we ask people to submit—their last tax return—but they also have to provide information about their assets. They might have a trust, they might have rental property, they might have water rights or they might have assets on the farm. Quite often the assets of a farming business are more complicated than just the assets of an average household.

Ms Rule: There's also a timing thing. Personal tax returns are not due to be lodged until the end of this month. If you applied for the payment in August, what you received in the previous financial year as personal income could well be reduced because of drought conditions and the like. So, it's also about currency of information that means that tax returns are not always the most appropriate mechanism.

Ms Leon: We opened Dubbo on 22 September. We opened Tamworth on 6 October and Gympie on 13 October. This weekend—the weekend that's just passed—we had Bathurst, Kingaroy and Bundaberg open. There's a rolling schedule of service centres, which we're advertising in the local region.

Mr Matthews: It's probably worth noting that that's on top of the Rural Financial Counselling Service, which is a service provider where part of its mandate is to assist people in their applications for farm household allowance. It's funded through the Department of Agriculture and Water Resources, and there was an increase in funding of about $5 million as part of the government's announcement around drought. That was specifically also to help people through the application process. It's a combination of what comes in through that and through opening our service centres and the mobile buses. So there are a range of things in place to help people with their applications.

Senator SINGH: Is there a third of any other DHS forms that could be stripped out?

Ms Leon: We are progressively improving all of our forms. Part of delivering modernisation is that we are going through and undertaking work with customers, doing user-centred design to redesign the forms to make them simpler and more accessible. Part of the welfare payment structure transformation, which we often talk about in this committee, is to simplify all of the claiming process for our customers.

Senator SINGH: But you've already done this for the forms for the farmers, so—

Ms Leon: Yes. And we've already done it for students. We've reduced the question set for students, in most cases, from 117 to 37.

Ms Leon: That's not for every student, but that largely relies on prepopulating the form and also having digital enablements. Depending on how you answer one question, you might not need to answer the others.

Ms Leon: But it does require us to turn the forms into smart forms. It's not just a matter of redesigning it on a piece of paper.

Senator SINGH: What about people seeking disability support who are suffering a terminal illness and trying to access DSP or another payment? Have you cut their form down?

Ms Leon: The disability pension is to be reformed in tranche 3 of delivering modernisation, which we were funded to deliver over this year and next year. It's on the schedule to be completed in tranche 3.

Senator SINGH: All right. It's still a while away. It's interesting: with what you've obviously tried to highlight in relation to reducing the form for farmers by a third, you specifically highlighted the income and assets as the stumbling block.

Ms Leon: That's the feedback we've had from farmers. We aren't just making this up. We've been engaging with farmers and their representatives and we understand from them that that is the part they find most complicated. The rest of the form is really just about proving their identity, proving that they're an Australian citizen or resident, providing us with information about who they live with so we know whether it's single or partnered—the usual kinds of questions you have to answer to apply for an income support payment.

Senator SINGH: Yes, but clearly some of them already have part of the process done—they'll have the income.

Ms Leon: No. With people who've previously received farm household allowance, we can verbally go through it with them: 'Is it all still the same as the last time we had information about you?' They don't need to do the whole claim form. But if they're a new customer, about whom we don't yet know anything, then, yes, they do have to provide us information about their identity, their Australian citizenship and the usual eligibility requirements before they get in the door for getting an Australian income support package.

Senator SINGH: I'm just trying to understand how these stumbling blocks can be removed, or at least how you can start processing—if they've provided the tax return, for example—and what the whole time frame is at that end as well.

Ms Leon: The median days to process the farm household allowance at the moment are 24.

Ms Leon: That's right. It's not an unreasonable amount of time. Yes, I know we want to get these done as quickly as possible. We have doubled the workforce on farm household allowance processing and we have deployed that extra support on weekends and in the mobile service centres to help people with the form, so there are not substantial backlogs of people waiting. As I mentioned, in the oldest category of claims—over 15 weeks—there are only 21 claims on hand and half of those are not actionable because we're waiting for information. With all of those older ones—12 weeks, 13 weeks, 14 weeks—there's only a handful of claims on hand. Most of the claims on hand are being processed quite quickly.

Senator SIEWERT: Did you have a general glitch where family tax benefits statements were going out saying that people had received more than they had?

Ms Leon: No. I did see the discussion you had with DSS this morning, and we looked into the issue you raised. There was a media report that said that had occurred. We investigated and that report was wrong.

Senator SIEWERT: Thank you. I'll take this one up separately then. Are you able to tell me how many people on DSP who are detained have applied to have their DSP suspended for the period of their detention?

Ms Leon: Yes. Regarding the number of people who have been detained who have had their payment suspended in 2017-18, there were 85 customers who had their payment cancelled and 7,937 customers who had their payment suspended due to imprisonment.

Senator SIEWERT: Thank you. We were talking this morning with DSS about how many people had or had not done the Program of Support. Can you cast more light on that?

Ms Rule: I haven't got much data on Program of Support, because I understand from this morning that DSS undertook to do a comprehensive data analysis on POS and get back to you.

Senator SIEWERT: Okay, thank you. Do you have data on how many people who applied for DSP have had multiple medical exemptions while on Newstart?

Ms Rule: No, because we can't necessarily see through our system easily the transfer of a person who's claimed DSP, then onto Newstart, then the number of medical exemptions. It's quite a complex data picture to be able to trace for those individuals. Again, we heard that question this morning. We couldn't source that data by tonight, but we're happy to take it on notice and see what we can provide.

Senator SIEWERT: I'm interested in both ways—those around DSP that have been transferred through to Newstart and then seek medical exemptions, but also people going the other way, who have been on Newstart, had medical exemptions and then go onto DSP.

Ms Rule: We can take that on notice.

Senator SIEWERT: Thank you. I have a whole lot of really technical questions that I'm just going to put on notice, hence my hesitancy to make sure I have actually filtered them out, because I think some of them will just take too long to answer. Can you tell me—or do you need to take this on notice—how many people and what percentage of people who have been through a program of support have actually obtained employment?

Ms Rule: No, I don't have that data. We can take that on notice.

Senator SIEWERT: Okay. You don't have the data now, but you are actually able to tell me—

Ms Rule: I'm not sure.

Ms Leon: We will know if they've gone off payment. I don't know if we will necessarily know whether that's because they've gained employment. So I think we'll have to look and see what our systems can tell us.

Senator SIEWERT: Okay. We could use them going off payment for a sort of substitute, but not quite, because they may have just dropped out of the system.

Ms Leon: Yes. Once they've left payment then we don't necessarily know what they're doing after that.

Senator SIEWERT: Could I also ask you to break that down, if you can, to people that identify as Aboriginal and not.

Ms Deininger: Can I just make a general comment in terms of numbers. We'll certainly take those questions on notice. For the 2016-17 year, in fewer than two per cent of cases where people were rejected, it's because they didn't undertake a program of support. I just wanted to mention that the program of support applies in relatively limited circumstances for those who are seeking to go onto DSP.

Ms Deininger: In terms of the people whose application for disability support pension was unsuccessful, only two per cent of those cases were because the person had to undertake a program of support. So I guess what I'm trying to say is that there are a whole range of reasons why people might not be eligible for DSP. A program of support is one potential reason, but they might need to undertake that before testing their eligibility. My general point is that that is a relatively small proportion of the overall group of people who are unsuccessful in their application for DSP.

Senator SINGH: I want to ask about welfare recipients that are transferring from Newstart to the age pension. It's been reported that people are facing delays of weeks or even months in transferring from Newstart when they're 65 to the age pension. Surely they wouldn't have to start a whole process from scratch when they're already receiving Newstart. Why would it have to take so long?

Mr Matthews: I don't have exact data on the number transferring, but in transfer to age pension there is generally a process where a person can start applying about 13 weeks prior to reaching age pension age to transfer into age pension. For people on payments that haven't responded to that, we do give them letters and approaches to remind them that they're able to do that. That circumstance does include some pre-populated information et cetera. There are some mechanisms in place to assist people to transition from that payment into age pension. But I don't have any data on hand about how many have gone through or the time taken for that to occur.

Senator SINGH: Are those Newstart recipients, the ones we're talking about that reach that age, being forced to put in a whole new application for the age pension?

Mr Matthews: They do need to apply tore the payment, so, yes. Where we have information, we can reuse information, but if for whatever reason their information has changed et cetera then we would need to seek some new information that was missing. It would depend on a case-by-case basis.

Mr Matthews: But it is a different payment, so, yes, they do notionally need to reapply, but we do assist them by basically running through a transition process, and there are assets thresholds.

Ms Leon: The assets test is different for the pension. A little bit like we talked about with farmers, sometimes people have more complicated assets than income.

Mr Matthews: Generally they do have more complicated arrangements.

Ms Leon: But we do remind them that they can apply 13 weeks before so they can get started, and we do prepopulate with the information that we already have. If they're in financial hardship, then we can prioritise the processing of their claim as well. If people tell us they're in financial hardship for this or for anything else, then we do prioritise the processing of their claim.

Senator SINGH: I think anyone on Newstart would be in financial hardship.

Ms Leon: Well, they are not in as much financial hardship as people who are not on any form of income support.

Mr Jackson: Just to expand on the secretary's point, we actually prioritise all people moving from Newstart. They are done as quickly as possible, because it is a fairly seamless process to move through.

Senator SINGH: You're saying it's a seamless, Mr Jackson. Then why are there people that are facing delays of months to go from Newstart to the age pension? I don't know how they live in the meantime.

Ms Leon: If there are any particular cases you want to refer to us, we're happy to look into them. As we mentioned in relation to the pension more generally, the biggest hold-up we face is when people haven't given us the information that we need to complete their claim. If people haven't given us their asset information, we can't complete their application.

Senator SINGH: These are some of the most vulnerable people in our community. It just does not make sense why it has to take months.

Ms Leon: It won't take eight months if we have all of their information.

Senator SINGH: We have had a number of complaints from people who have applied to Centrelink for sickness benefits. They have described the process as nothing short of humiliating, time-consuming and downright horrible. There are cases of people rushing to get their affairs in order due to a sudden diagnosis, subsequent operations, at the commencement of chemotherapy. Have you been aware of some of these complaints of sick Australians who are struggling to manage to get through this Centrelink system?

Ms Leon: I'm not aware of the cases that you're referring to. I can tell you that our median days to process sickness allowance in 2017-18 was 35 days and that it is still running at 35 days now in 2018-19.

Mr Jackson: Equally, I think we had 318 sickness benefit claims.

Senator SINGH: I understand these complaints have been raised with the department and with the minister. But you're saying you don't know anything about them.

Ms Leon: I don't personally know about them, but I'm happy to take on notice whether we've had complaints about sickness allowance.

Senator SINGH: Who in the department here does know about them? There are probably at least 30 people sitting behind you.

Mr Jackson: In part of the earlier session today we spoke about the number of complaints that we had. I think it was 239,000 complaints. So I apologise for not knowing the details of all of those. But we absolutely do track them, as I said before, and we are more than able to go back and look at whether there have been any specific complaints, and if it's been to the minister then the minister's office could have forwarded to us. Certainly if it's come direct to the secretary, me or even through our escalation process, which is well organised, we can certainly come back and advise you of any complaints that we have had on that particular issue. Equally, as the secretary has said, if, with the customer's consent, they wish to seek us to have a look at it and do a service recovery, we are more than happy to help.

Senator SINGH: A lot of this comes back to the forms and the process that's in place. As you've simplified the forms for farmers, why can't you simplify them for sick Australians?

Ms Leon: We are going through a process of simplifying all our processes, but we can't do it all at once. So it's a seven-year program of work—the welfare payment infrastructure transformation—and we're about halfway through. In tranche 3 we have already simplified the online claim form for jobseekers, which is a cohort of over a million people every year. The next one we're doing will be age pension and then we'll progressively move through all the main payment types. We are undertaking the most significant transformation in the history of welfare in Australia, so it can't all be done in one year, but we are getting about it in as quick a way as we possibly can.

Mr Jackson: Without wanting to cut into Ms Rule's space as well, we obviously have to engage with policy agencies who own the particular policy, because a lot of information required on the forms is mandated by those policy agencies, so we do not have the sole ability to do that. But we work very closely with those agencies to provide feedback and seek to improve forms continuously.

Senator SINGH: This is not just about waiting for asset information, as you keep referring to. This is also about staff ratios. This is also about processing procedures that are in place. I think it's a bit rich that you keep coming back to this one point.

Ms Leon: Only in relation to the pension, Senator. I raised the point about assets.

Senator SINGH: You raised it with farmers; you raised it with pensions.

Ms Leon: Because they both often are circumstances where people have complicated assets. It's just a fact.

Senator SINGH: There are a number of Centrelink inquiries from distressed constituents on a range of different payments. We're talking at the moment about sickness benefits. They have had their claims delayed, when what would be for most people acceptable time frames. So can the department explain what changes, if any, have occurred with staff ratios, with processing procedures that have led to this?

Ms Leon: There hasn't been any reduction in the median days to process for sickness allowance between this year and last year. It's still at 35 days. In terms of the overall staff of the department, we have more total staff this year than we had last year. I think I gave evidence last year that we had more staff than the year before. So it's not about a lack of people to process these, and that's why we're bringing down telephony wait times and that's how we're bringing down the processing backlog—because we are deploying more and more hands on deck to do that.

Senator SINGH: That 35 days for sickness benefits is on average though, isn't it?

Ms Leon: It's median. Bear in mind we have something like 800 million transactions a year. So I'd like to say that 100 per cent of those are perfect, but I do acknowledge that in 800 million transactions a year not all of them are going to go as seamlessly as all of the rest. We aim to achieve customer satisfaction for all of them, but it is a very large and complex operation.